In the early 1990s EU governments had to choose between defending their exchange rates and the health of their economies. Now they have to choose between disappointing the bond markets and imposing austerity on their voters.
“Firefighting: The sovereign-debt crisis has echoes of the ERM debacle“, The Economist, 14 July 2011
Three major uncertainties are rattling the markets:
- the lack of EMU political leadership as regards (i) co-ordination across countries and with the ECB as well as (ii) a reluctance to push through vital restructuring/austerity packages
- weak growth prospects that mean a severely reduced ability to repay debt as well as added stress for the banking sector
- the inadequacy of existing bail-out funds
For a useful overview, see “Europe’s debt crisis: Fudge, the final frontier“, The Economist, 10 Sep 2011.
SNB takes a bold move to stem the huge rise in its “safe haven” currency…
Oficial statement from the SNB Swiss National Bank, 6 Sep 2011
Swiss currency move: what the analysts say Guardian, 6 Sep 2011
… while Switzerland tops the World Economic Forum’s overall rankings in The Global Competitiveness Report 2011-2012.
Tesco to issue renminbi bond, Financial Times, 25 August 2011
Amusing approaches to “solving” the Eurozone’s problems…
How to save the euro – kick out Germany, The Times, 17 August 2011
A pseudo solution to the euro’s failings, Financial Times, 21 March 2010
Message to US Congress…..When Zimbabwe starts wondering whether to abandon its US$ peg, you know it’s getting serious!
Is it time to ditch the US$?, Newsday Zimbabwe, 10 August 2011
Academic publishers have jumped deftly from paper to the internet. For more than a decade the dominant model has been the “big deal”. Publishers sell access to large bundles of electronic journals for a price based on what colleges used to pay for paper ones. Prices of big deals rise at about double the rate of inflation.
This model has provided an unprecedented wealth of material to researchers and fat profits to publishers. But fiscal crises, particularly in America, are straining big deals. State funding per university student in Arizona has fallen by roughly half since 2007-08. Libraries have taken a hit.
A library with a bundled subscription deal cannot make ends meet by dropping a few journals, as it could in the old days. Instead it must take the drastic step of leaving the all-you-can-eat buffet for the à la carte restaurant……
Why Barcelona is more than just a great football team…http://www.economist.com/node/18709691
Many of the world’s most vibrant economies are effectively shadowing the US dollar, in an arrangement that has been dubbed “Bretton Woods 2”. There are plenty of reasons why the international community is less than happy with the outcome…
The global monetary system: Beyond Bretton Woods 2, The Economist, 4 Nov 2010
Europe’s EMU has always had a strong political agenda but this is likely to come under strain as the global financial crisis deepens. The anti-EMU brigade will predict a euro breakup but less catastrophic alternatives are available as Southern Africa’s CMA shows…
The Common Monetary Area in Southern Africa: Shocks, Adjustment, and Policy Challenges, IMF Working Paper, Jul 2007